Judge Teresa A. Beaudet, Case Number: 21STCV37799, Date: 2024-01-18 Tentative Ruling

On October 12, 2021, Plaintiff Alex Cotraviwat (“Plaintiff”) filed this action against Defendant Charlie Cheng-Han Tsai (“Defendant”). The Complaint alleges causes of action for (1) breach of contract and (2) unjust enrichment.

On November 23, 2022, Defendant filed an answer to the Complaint. Defendant’s answer alleges affirmative defenses of unconscionability and failure of consideration.

Plaintiff now moves for summary judgment or in the alternative, summary adjudication as to the first and second causes of action of Plaintiff’s Complaint and Defendant’s first and second affirmative defenses. Defendant opposes.

Objection No. 1: sustained. (See Roger v. County of Riverside (2020) 44 Cal.App.5th 510, 531, “assertions ‘upon information and belief’ are insufficient to support a factual finding…declarations followed by the phrase ‘To the best of my knowledge’ or upon ‘information and belief’ are insufficient because they ‘indicate[] something less than the ‘personal knowledge’ required under Code of Civil Procedure section 437c’]…” [emphasis in original].)

“[A] motion for summary judgment shall be granted if all the papers submitted show that there is no triable issue as to any material fact and that the moving party is entitled to a judgment as a matter of law.” (Code Civ. Proc., § 437c, subd. (c).) “A party may move for summary adjudication as to one or more causes of action within an action, one or more affirmative defenses, one or more claims for damages, or one or more issues of duty, if the party contends that the cause of action has no merit, that there is no affirmative defense to the cause of action, that there is no merit to an affirmative defense as to any cause of action, that there is no merit to a claim for damages, as specified in¿Civil Code section 3294, or that one or more defendants either owed or did not owe a duty to the plaintiff or plaintiffs.” (Code Civ. Proc., § 437c, subd. (f)(1).)¿“A motion for summary adjudication shall be granted only if it completely disposes of a cause of action, an affirmative defense, a claim for damages, or an issue of duty.” (Ibid.)¿

The moving party bears the initial burden of production to make a prima facie showing that there are no triable issues of material fact. ((Aguilar v. Atlantic Richfield Co. (2001) 25 Cal.4th 826, 850.) If the moving party carries this burden, the burden shifts to the opposing party to make a prima facie showing that a triable issue of material fact exists. ((Ibid.) Courts “liberally construe the evidence in support of the party opposing summary judgment and resolve doubts concerning the evidence in favor of that party.” ((Dore v. Arnold Worldwide, Inc. (2006) 39 Cal.4th 384, 389.)

For purposes of motions for summary judgment and summary adjudication, a plaintiff “has met his or her burden of showing that there is no defense to a cause of action if that party has proved each element of the cause of action entitling the party to judgment on the cause of action.” (Code Civ. Proc., § 437c, subd. (p)(1).)

In the Complaint, Plaintiff alleges that “[o]n or about April 21, 2020, [Plaintiff] loaned [Defendant] $1,250,000.00, evidenced by a secured promissory note (the ‘Loan’).” (Compl., ¶ 8.) “The Loan was due to be paid in full on July 21, 2020. However, [Defendant] failed to repay the loan as of the due date. After [Defendant’s] default, [Plaintiff] undertook repeated efforts to recoup the borrowed funds from [Defendant] but to no avail.” (Compl., ¶ 8.)

Plaintiff alleges that “[Defendant’s] failure to repay the loan, together with the pendency of other personal and business-related disputes between [Plaintiff] and [Defendant], culminated in the entry and execution of a settlement agreement between [Plaintiff] and [Defendant] on or about September 1, 2021 (the ‘Settlement Agreement’).” (Compl., ¶ 9.) “Pursuant to the Settlement Agreement, [Defendant] agreed, inter alia, to pay [Plaintiff] the sum of $727,000.00 under an installment plan. If a payment was late…[Defendant] was required to pay a late fee equal to 5% of the unpaid amount. The Settlement Agreement also imposed interest to accrue on all unpaid amounts at an annual rate of 10%...” (Compl., ¶ 10.)

“The initial installment payment of $100,000.00 was due to be paid on August 4, 2021. Despite the agreed-upon amount for the first installment, [Defendant] failed to pay that initial installment payment when due. Instead, on or about August 9, 2021, [Defendant] issued a…payment of $1,000.00.” (Compl., ¶ 11.) “The second installment payment of $142,333.00 was due to be paid on August 27, 2021. [Defendant] failed to pay that second installment payment when due, and as of the date of filing [the] Complaint, no such payment has been received by [Plaintiff].” (Compl., ¶ 12.) “The third installment payment of $242,333 under the Settlement Agreement was due to paid [sic] on September 27, 2021. [Defendant] failed to pay that third installment payment when due, and as of the date of filing of [the] Complaint, no such payment has been received by [Plaintiff].” (Compl., ¶ 16.)

Plaintiff alleges that “there is a balance due and owing from [Defendant] to [Plaintiff] of $726,000.00, together with applicable late fees and accrued interest thereon.” (Compl., ¶ 19.)

In the first cause of action for breach of contract, Plaintiff alleges that “[o]n or about September 1, 2021, [Plaintiff] and [Defendant] entered into a valid and binding contract. Specifically, [Plaintiff] and [Defendant] entered into that certain Settlement Agreement and agreed to be bound by its terms. Among other things, [Defendant] agreed to pay the total sum of $727,000.00 in accordance with a schedule of installment payments.” (Compl., ¶ 21.) Plaintiff alleges that “[Defendant] breached the parties’ Settlement Agreement by, among other things, failing to satisfy his payment obligations when due, and anticipatorily breaching and/or repudiating his obligation to satisfy all installment payments required under the Settlement Agreement. Specifically, as of the date of this Complaint, [Defendant] failed to pay, which failure continues to this day, the total amount of $726,000.00.” (Compl., ¶ 23.)

Plaintiff asserts that he has established each of the elements of his breach of contract cause of action. As to the first element of the breach of contract cause of action, Plaintiff states that “[a]ttached to the concurrently filed Appendix of Exhibits as Exhibit O and fully incorporated herein, is a true and correct copy of the fully executed Settlement Agreement and Release that I entered into with Charlie Tsai, with an effective date of August 1, 2021 (the ‘Settlement Agreement’).” (Cotraviwat Decl., ¶ 34, Ex. O.)

As to the second element of the breach of contract cause of action, Plaintiff asserts that “[t]here is no dispute that [Plaintiff] performed his contractual obligations required under the terms of the Settlement Agreement…” (Mot. at p. 6:6-7.) The Settlement Agreement provides, inter alia, “Cancellation of the Note; Release of Security on Tsai’s Home. The Parties agree that the Tsai Loan is hereby cancelled and of no further force and effect. Cotraviwat releases any security interest on Tsai’s home located at Number 258, 15th Floor, Xindian Road, Xindian District, New Taipei City.” (Cotraviwat Decl., ¶ 34, Ex. O, § 6.) The Settlement Agreement also provides, inter alia, that “[w]ith the exception of the obligations set forth in this Agreement, the Parties hereby release each other and their respective owners, members, officers, directors, employees, predecessors, successors and attorneys from any and all existing claims, liens, demands, causes of action, obligations, damages, and liabilities of any nature whatsoever, whether or not now known, suspected, or claimed, that arise out of or relate to the Disputed Matters, the Tsai Loan, the Transferred Membership Interests, and the Transfer and Assignment Agreements between Tsai and Jaback.” (Cotraviwat Decl., ¶ 34, Ex. O, § 7(a).) Plaintiff states that “I, on behalf of myself and Jaback Group, performed all conditions, covenants, and promises required under the terms of the Settlement Agreement, including canceling the Note, releasing the security interest in the residential property located at Number 258, 15th Floor, Xindian Road, Xindian District, New Taipei City, and providing a comprehensive release of all known and unknown claims to Charlie Tsai.” (Cotraviwat Decl., ¶ 35.)

As to the third element of the breach of contract cause of action, Plaintiff asserts that “[t]here is no dispute that Defendant breached the Settlement Agreement by failing to pay $726,000.00 of the total $727,000.00 settlement sum.” (Mot. at p. 6:9-10.) The subject Settlement Agreement provides, inter alia, that “Tsai shall pay Cotraviwat the sum of $727,000 plus interest and any late fees pursuant to the schedule and under the terms set forth below.” (Cotraviwat Decl., ¶ 34, Ex. O, § 3(a).)[1]

Plaintiff indicates that on March 8, 2023, Defendant served responses to Plaintiff’s Special Interrogatories, Set No. 1. (Suh Decl., ¶ 16, Ex. CC.) Plaintiff’s Special Interrogatory No. 16 provides, “State all facts RELATING TO any of YOUR efforts to pay amounts owed on the SETTLEMENT AGREEMENT.” (Ibid.) Defendant’s response to Special Interrogatory No. 16 provides, “Defendant objects to this interrogatory on the grounds that it is vague, ambiguous, and therefore unduly burdensome. Without waiving these objections, Defendant responds as follows: Defendant paid $1,000 on or about August 9, 2021, Defendant tried but did not have funds to pay further amounts owed on the SETTLEMENT AGREEMENT.” (Ibid.) In addition, in his supporting declaration dated October 26, 2023, Plaintiff states that “[t]o date, aside from the August 9, 2021 payment of $1,000.00, I have not received any further monetary payment from Charlie Tsai or anyone else on behalf of Charlie Tsai as required under the terms of the Settlement Agreement. Accordingly, Charlie Tsai has failed to pay the balance of $726,000.00 due under the Settlement Agreement even as of the date of this declaration.” (Cotraviwat Decl., ¶ 45.)

As to the fourth element of the breach of contract cause of action, Plaintiff asserts that “[t]here is no dispute that [Plaintiff] was indeed harmed as a proximate result of Defendant’s breach of the Settlement Agreement…” (Mot. at p. 6:10-12.) Plaintiff states in his supporting declaration that “Charlie Tsai’s breach of the Settlement Agreement has caused me harm in that I effectively canceled the underlying Note and released Charlie Tsai of all claims relating to the various disputed matters between us, but did not receive the total monetary payment due under the Settlement Agreement. As such, I have been damaged in the amount of $726,000.00, together with recoverable pre-judgment interest, attorneys’ fees, and costs as specifically provided for in the Settlement Agreement.” (Cotraviwat Decl., ¶ 45.)

Based on the foregoing, the Court finds that Plaintiff has met his initial burden of showing that there is no defense to the first cause of action for breach of contract. (See Code Civ. Proc., § 437c, subd. (p)(1), “[a] plaintiff or cross-complainant has met his or her burden of showing that there is no defense to a cause of action if that party has proved each element of the cause of action entitling the party to judgment on the cause of action.”) The burden now shifts to Defendant to show that a triable issue of one or more material facts exists as to the first cause of action for breach of contract. (Code Civ. Proc., § 437c, subd. (p)(1).)

In the opposition, Defendant asserts that “usury supports an affirmative defense of failure of consideration.” (Opp’n at p. 2:1-2.) Defendant notes that “[t]he essential elements of usury are: (1) The transaction must be a loan or forbearance; (2) the interest to be paid must exceed the statutory maximum; (3) the loan and interest must be absolutely repayable by the borrower; and (4) the lender must have a willful intent to enter into a usurious transaction.” ((Ghirardo v. Antonioli (1994) 8 Cal.4th 791, 798.) Defendant argues that “[t]he underlying April 21, 2020 promissory note between the parties (Plaintiff’s Exh. D) contains all of these elements.” (Opp’n at p. 3:21-23.)

In his declaration in support of the motion, Plaintiff states that “[a]ttached to the concurrently filed Appendix of Exhibits as Exhibit D and fully incorporated herein, is a true and correct copy of the April 21, 2020 Promissory Note.” (Cotraviwat Decl., ¶ 11, Ex. D.) The subject Promissory Note provides, inter alia, that “[f]or value received, Charlie Cheng-Han Tsai, an individual (hereinafter referred to as ‘Borrower’), promises to pay to the order of Alex Cotraviwat, an individual (‘Lender’), at his offices or at such other place as the Lender hereof may from time to time designate to Borrower in writing, the principal sum of one million two hundred fifty thousand Dollars ($1,250,000), with interest as specified below, upon the terms and conditions set forth in this promissory note (the ‘Note’).” (Cotraviwat Decl., ¶ 11, Ex. D.)

Defendant notes that the Promissory Note further provides that “Interest in the total amount of three hundred seventy-five thousand dollars ($375,000) shall accrue on the principal balance of this Note effective on the date hereof. Accrued but unpaid interest shall be due and payable no later than three (3) months from the date of this Note (i.e July 21, 2020) (the ‘Final Maturity Date’). For illustration purposes, with no prepayment of principal or interest, the total payment due on the Final Maturity Date would be $1,625,000.” (Cotraviwat Decl., ¶ 11, Ex. D.) Defendant asserts, inter alia, that the Promissory Note establishes “30% interest in 3 months,” which “far exceed[s] any limit in Article XV.” (Opp’n at p. 4:4.) Cal. Const., art. XV, § 1, cited by Defendant, provides in part as follows:

“The rate of interest upon the loan or forbearance of any money, goods, or things in action, or on accounts after demand, shall be 7 percent per annum but it shall be competent for the parties to any loan or forbearance of any money, goods, or things in action to contract in writing for a rate of interest:

(1) For any loan or forbearance of any money, goods, or things in action, if the money, goods, or things in action are for use primarily for personal, family, or household purposes, at a rate not exceeding 10 percent per annum; provided, however, that any loan or forbearance of any money, goods or things in action the proceeds of which are used primarily for the purchase, construction or improvement of real property shall not be deemed to be a use primarily for personal, family or household purposes; or

(2) For any loan or forbearance of any money, goods, or things in action for any use other than specified in paragraph (1), at a rate not exceeding the higher of (a) 10 percent per annum or (b) 5 percent per annum plus the rate prevailing on the 25th day of the month preceding the earlier of (i) the date of execution of the contract to make the loan or forbearance, or (ii) the date of making the loan or forbearance established by the Federal Reserve Bank of San Francisco on advances to member banks under Sections 13 and 13a of the Federal Reserve Act as now in effect or hereafter from time to time amended (or if there is no such single determinable rate of advances, the closest counterpart of such rate as shall be designated by the Superintendent of Banks of the State of California unless some other person or agency is delegated such authority by the Legislature).

No person, association, copartnership or corporation shall by charging any fee, bonus, commission, discount or other compensation receive from a borrower more than the interest authorized by this section upon any loan or forbearance of any money, goods or things in action.”

It appears that as to the third element of usury, Defendant contends that “the loan is repayable by the borrower. This rule addresses complex financial instruments that are irrelevant here, for the parties’ money loan with a fixed amount and timeline for repayment in cash.” (Opp’n at p. 4:8-10.) Defendant does not appear to cite any supporting evidence as to this element.

Defendant also asserts that “the lender Cotraviwat intended to enter into a usurious transaction.” (Opp’n at p. 4:11.) Defendant notes that “[t]he intent sufficient to support the judgment [of usury] does not require a conscious attempt, with knowledge of the law, to evade it. The conscious and voluntary taking of more than the legal rate of interest constitutes usury and the only intent necessary on the part of the lender is to take the amount of interest which he receives; if that amount is more than the law allows, the offense is complete.” (Ghirardo v. Antonioli, supra, 8 Cal.4th at p. 798 [internal quotations omitted].) The Court notes that Defendant also does not appear to cite any supporting evidence as to this element.

Defendant further asserts that the “[p]arties’ 2021 ‘Settlement Agreement and General Release’ does not cleanse the usury from the 2020 Promissory Note or otherwise make usurious interest collectable by Plaintiff.” (Opp’n at p. 5:1-2.) Defendant cites to Westman v. Dye (1931) 214 Cal. 28, 38, where the California Supreme Court noted that “[i]f a transaction is usurious in its inception, it remains usurious until purged by a new contract; and all future transactions connected with or growing out of the original are usurious and without valid consideration. An original taint of usury attaches to the whole family of consecutive obligations and securities growing out of the original vicious transaction; and none of the descendant obligations, however remote, can be free of the taint if the descent can be fairly traced. Every renewal of a note given for a usurious loan of money is subject to the defense of usury between the original parties and purchaser with notice; but a renewal in the hands of a bona fide purchaser for value, without notice is valid.” (Internal quotations omitted, emphasis in original.) Defendant argues that “in this case, the 2021 Settlement Agreement was expressly a descendant obligation and extension growing out of the original usurious April 21, 2020 promissory note...” (Opp’n at p. 8:1-2.)

In the reply, Plaintiff counters that “[a]ny usuriousness in the note was purged by the Settlement Agreement.” (Reply at p. 4:20.) Plaintiff asserts that “the Settlement Agreement does not reference any interest amount, usurious or otherwise, originally called for in the Note…Recitals A and B of the Settlement Agreement clearly reference only the $1.25 million principal amount unpaid on the Note, directly refuting Defendant’s unsupported contention that prior to executing the Settlement Agreement, Mr. Cotraviwat took the position that Defendant owed both the principal and interest on the Note.” (Reply at p. 5:6-10, emphasis omitted.)

Recitals A and B of the Settlement Agreement provide that “A. On or around April 21, 2020, Cotraviwat loaned to Tsai $1,250,000, maturing on July 21, 2020 secured by Tsai’s home in Taiwan, pursuant to the terms of a written promissory note (the ‘Tsai Loan’)” and that “B. Tsai has failed to repay the Tsai Loan, and as of the date of this Agreement, it is more than one-year overdue…” (Cotraviwat Decl., ¶ 34, Ex. O, Recitals A, B.)

Plaintiff also asserts that “in proclaiming that the purported taint of any usury in the Note creeped into the Settlement Agreement, Defendant clearly ignores the fact that the Note was extinguished and canceled, having no further force and effect, upon entry of the Settlement Agreement.” (Reply at p. 5:21-23, emphasis omitted.) Plaintiff cites to paragraph 6 of the Settlement Agreement, which, as set forth above, provides, “Cancellation of the Note; Release of Security on Tsai’s Home. The Parties agree that the Tsai Loan is hereby cancelled and of no further force and effect. Cotraviwat releases any security interest on Tsai’s home located at Number 258, 15th Floor, Xindian Road, Xindian District, New Taipei City.” (Cotraviwat Decl., ¶ 34, Ex. O, § 6, italics added.) As discussed, Westman v. Dye, supra, 214 Cal. 28 at page 38, relied upon by Defendant in the opposition, provides that “[i]f a transaction is usurious in its inception, it remains usurious until purged by a new contract….”

Plaintiff also notes that the “Mutual Release” provision of the Settlement Agreement provides, inter alia, that “With the exception of the obligations set forth in this Agreement, the Parties hereby release each other and their respective owners, members, officers, directors, employees, predecessors, successors and attorneys from any and all existing claims, liens, demands, causes of action, obligations, damages, and liabilities of any nature whatsoever, whether or not now known, suspected, or claimed, that arise out of or relate to the Disputed Matters, the Tsai Loan, the Transferred Membership Interests, and the Transfer and Assignment Agreements between Tsai and Jaback.” (Cotraviwat Decl., ¶ 34, Ex. O, § 7(a).) The Mutual Release also provides that “[h]aving been fully informed of the provisions of California Civil Code Section 1542, the Parties nevertheless hereby waive any rights which they may otherwise have to dispute the scope of this Agreement on the grounds of said code section or any similar provision of state or federal law.” (Cotraviwat Decl., ¶ 34, Ex. O, § 7(d), italics added.)[2] Plaintiff asserts that “the interest rate of a prior, canceled and released loan is wholly irrelevant to the Court’s determination regarding the validity and enforceability of a subsequent settlement agreement.” (Reply at p. 6:7-8.)

In the opposition, Defendant cites to Hardwick v. Wilcox (2017) 11 Cal.App.5th 975, 978, where “[b]etween 1999 and 2010, Albert P. Wilcox made a series of loans to James N. Hardwick. In 2013, Hardwick filed [the] action to recover usurious interest and prevent Wilcox from foreclosing on property securing his loans. Wilcox countersued for breach of contract and judicial foreclosure. The trial court entered judgment in favor of Hardwick, finding, among other things, that usurious interest payments made over the course of the relationship offset the principal debt, and that Hardwick could recover $227,235.83 in interest payments he made during the two years prior to the filing of this lawsuit. On appeal, Wilcox contend[ed] the judgment must be reversed because (1) Hardwick waived his usury claim with respect to any loan payment he made prior to April 2012, and (2) the statute of limitations bars Hardwick’s claim with respect to any loan that was paid off more than two years before [the] lawsuit was filed.” The Cour of Appeal affirmed. (Ibid.)

The Court of Appeal in Hardwick found, inter alia, that “[t]he record supports the trial court’s finding that construing this particular release as a waiver of usury would violate public policy. Section 1668 of the Civil Code states: ‘All contracts which have for their object, directly or indirectly, to exempt anyone from responsibility for his own fraud, or willful injury to the person or property of another, or violation of law, whether willful or negligent, are against the policy of the law.’ At trial, Hardwick stipulated that the rate of interest he set in every one of the notes in the series of notes at issue in this case exceeded the constitutional maximum rate. This concession and other evidence regarding the interconnection between the series of 15 notes and amendments to the notes substantially supports the trial court’s finding that the Forbearance Agreement was an extension of the underlying usurious loan transaction. Thus, construing the unilateral general release in that agreement as a waiver of usury would allow Wilcox to escape the consequences of his violation of the law by permitting him to benefit from his illegal contract and retain the usurious interest he extracted from Hardwick.”

In the reply, Plaintiff asserts that Hardwick is distinguishable, as “the Hardwick court deliberately and repeatedly pointed out that its ruling was limited by the fact that the general unilateral release of known and unknown claims relating to previously usurious loans was contained in a ‘Forbearance Agreement’ and not in a settlement agreement.” (Reply at p. 6:21-23, emphasis omitted.) Indeed, the Hardwick Court found, inter alia, that “[t]urning to the second prong of the trial court’s analysis, assuming that policy concerns could be overcome, the court found that the unilateral release did not constitute a knowing waiver of Hardwick’s usury claim. This finding was relevant because Wilcox attempted to invoke the proposition that a usury claim can be released in a settlement agreement. In the present case, the factual evidence showed that the release was not part of a settlement of a usury claim or of any other dispute. Rather, the sole purpose of the Forbearance Agreement was to extend the due dates for the loans.” (Hardwick v. Wilcox, supra, 11 Cal.App.5th at p. 989 [internal citation omitted].) The Hardwick Court further noted that “Wilcox cites Casey v. Proctor (1963) 59 Cal.2d 97, 111…for the following proposition: ‘[T]he policy of the law is to encourage out-of-court settlements. To further this policy the parties to a dispute should be encouraged to negotiate settlements and to enter into releases.’…the policy favoring out of court settlements does not benefit Wilcox because the release in this case was not part of a settlement agreement.” ((Id. at p. 990.) Here, a Settlement Agreement between the parties is at issue.

Plaintiff also asserts that “[t]he Hardwick court was concerned that construing the unilateral (not mutual) release as a waiver of an unknown usury defense would allow Wilcox (the lender) to retain usurious interest already extracted and paid by Hardwick…Here, we have a mutual release and Defendant never paid any amounts, principal or interest to Mr. Cotraviwat on the Note so the usury-based public policy concern present in Hardwick is nonexistent on the present facts.” (Reply at p. 6:16-20, emphasis omitted.) The Court agrees that Hardwick is distinguishable from the facts here.

Plaintiff cites to Credit Finance Corp. v. Mox (1932) 125 Cal.App. 583, 586, where the Court of Appeal noted that “as said in Lamb v. Herndon, 97 Cal. App. 193 [275 P. 503, 508], in the absence of a showing of fraud or undue influence, a compromise agreement, like a judgment, is decisive of the rights of the parties thereto, and [e]ven though there had been usury in the original transaction, it would seem that upon a settlement upon which each of the parties released the others from all claims and liabilities of every character then existing, the right to rely upon a previous usurious transaction would cease to exist.” (Internal quotations omitted.) In his opposition to the instant motion, Defendant does not appear argue that any fraud or undue influence exists here.

Defendant also argues in the opposition that he “has already repaid Plaintiff more than the principal of the April 21, 2020 promissory note, such that any award in this case would only be usurious interest from that promissory note.” (Opp’n at p. 9:9-10.)

Defendant notes that the Settlement Agreement provides, inter alia, that “Tsai transfers all of his rights and interests in the following cars to Cotraviwat: i) 2018 Mercedes AMG GTR - VIN # WDDYJ7KA2JA017186 ii) 1993 Acura NSX - VIN # JH4NA1150PT000171…” (Cotraviwat Decl., ¶ 34, Ex. O, § 1.) Defendant also notes that the Settlement Agreement provides that “Tsai hereby irrevocably assigns to Cotraviwat all of Tsai’s rights to and interest in that unsecured loan he made to Zurdo Ramirez in the principal amount of $300,000, pursuant to an oral agreement only…with a current estimated total value of $324,000.” (Cotraviwat Decl., ¶ 34, Ex. O, § 2.) In addition, Defendant notes that the Settlement Agreement provides that “[e]ffective as of the date of this Agreement, Tsai shall transfer, convey, and assign to Jaback, and Jaback shall acquire from Tsai, all of Tsai’s right, title and interest in and to the membership interests of the Jaback Subsidiaries owned by Jaback—namely 10% membership interest in Kinjabang and 8.73% membership interest in Klimon (the ‘Transferred Membership Interests’),” and that “Tsai and Jaback agree that, notwithstanding the valuations assigned to Kinjabang and Klimon and membership interests in each in the 2021 Investment Rounds, the Transferred Membership Interests in Kinjabang shall be valued at $500,000 total and the Transferred Membership Interests in Klimon shall be valued at $436,500 total.” (Cotraviwat Decl., ¶ 34, Ex. O, § 4(a), 4(c).)

Defendant asserts that “[t]he stated valuations of the assets transferred from Mr. Tsai to Mr. Cotraviwat pursuant to the Settlement Agreement (as stated in the Settlement Agreement itself) total $1,260,500, which exceeds the $1,250,000 principal of the April 21, 2020 Promissory Note.” (Opp’n at p. 10:23-25.) In support of this assertion, Defendant cites to his Additional Material Fact (“AMF”) No. 9, which cites generally to the Settlement Agreement and the Promissory Note. (See Defendant’s AMF No. 9.) However, it is unclear how Defendant arrived at the purported amount of $1,260,500. In addition, Defendant does not cite any legal authority in support of his arguments contained in Section “IV” of the opposition. Moreover, Defendant notes that “[i]n the absence of fraud the inadequacy of consideration will not defeat a contract.” ((Taylor v. Taylor (1944) 66 Cal.App.2d 390, 398.)

As set forth above, the Court finds that Plaintiff has met his initial burden of showing that there is no defense to the first cause of action for breach of contract. The Court does not find that Defendant has met his burden to show that a triable issue of material facts exists as to this cause of action. The Court does not find that Defendant has shown that the subject Settlement Agreement is a usurious transaction.

In the second cause of action for unjust enrichment, Plaintiff alleges that “[d]espite the Settlement Agreement, and repeated requests for satisfaction of the payment terms thereunder, [Defendant] refuses to pay the agreed-upon settlement sum to [Plaintiff].” (Compl., ¶ 27.) Plaintiff alleges that “[a]s a direct and proximate result of [Defendant’s] continuing conduct, [Defendant] has been unjustly enrichment [sic] to the material detriment of [Plaintiff] in the amount of at least $726,000.00 as of present day.” (Compl., ¶ 29.)

“Generally, one who is unjustly enriched at the expense of another is required to make restitution. The elements of a cause of action for unjust enrichment are simply stated as “receipt of a benefit and unjust retention of the benefit at the expense of another.” (Professional Tax Appeal v. Kennedy-Wilson Holdings, Inc. (2018) 29 Cal.App.5th 230, 238 [internal citation omitted].) Plaintiff asserts that “[i]n this case, Defendant was conferred a benefit at the expense of [Plaintiff] when [Plaintiff] canceled the Note, released security interest in the Taiwan Property, and provided Defendant a comprehensive general release of all known and unknown claims arising from and relating to the Note and the various disputed matters between [Plaintiff] and Defendant.” (Mot. at p. 7:11-14.)

As discussed, the Settlement Agreement provides, inter alia, “Cancellation of the Note; Release of Security on Tsai’s Home. The Parties agree that the Tsai Loan is hereby cancelled and of no further force and effect. Cotraviwat releases any security interest on Tsai’s home located at Number 258, 15th Floor, Xindian Road, Xindian District, New Taipei City.” (Cotraviwat Decl., ¶ 34, Ex. O, § 6.) The Settlement Agreement also provides, inter alia, that “[w]ith the exception of the obligations set forth in this Agreement, the Parties hereby release each other and their respective owners, members, officers, directors, employees, predecessors, successors and attorneys from any and all existing claims, liens, demands, causes of action, obligations, damages, and liabilities of any nature whatsoever, whether or not now known, suspected, or claimed, that arise out of or relate to the Disputed Matters, the Tsai Loan, the Transferred Membership Interests, and the Transfer and Assignment Agreements between Tsai and Jaback.” (Cotraviwat Decl., ¶ 34, Ex. O, § 7(a).)

Plaintiff states in his supporting declaration that “Charlie Tsai’s breach of the Settlement Agreement has caused me harm in that I effectively canceled the underlying Note and released Charlie Tsai of all claims relating to the various disputed matters between us, but did not receive the total monetary payment due under the Settlement Agreement. As such, I have been damaged in the amount of $726,000.00, together with recoverable pre-judgment interest, attorneys’ fees, and costs as specifically provided for in the Settlement Agreement.” (Cotraviwat Decl., ¶ 45.) As discussed, Plaintiff states that “Charlie Tsai has failed to pay the balance of $726,000.00 due under the Settlement Agreement even as of the date of this declaration.” (Ibid.)

In light of the foregoing, the Court finds that Plaintiff has met his initial burden of showing that there is no defense to the second cause of action for unjust enrichment. In the opposition, Defendant does not appear to specifically address Plaintiff’s second cause of action. Rather, Defendant generally asserts that “usury supports an affirmative defense of failure of consideration.” (Opp’n at p. 2:1-2.) As discussed above, the Court does not find that Defendant has shown that the Settlement Agreement is a usurious transaction.

In light of the foregoing, the Court grants Plaintiff’s motion for summary judgment as to Plaintiff’s Complaint.

In the motion, Plaintiff asserts that “in the alternative, Plaintiff is entitled to summary adjudication as to Defendant’s affirmative defenses.” (Opp’n at p. 7:25-26.) As set forth above, the Court grants Plaintiff’s motion for summary judgment as to Plaintiff’s Complaint. Thus, the Court finds that Plaintiff’s alternative request for summary adjudication of Defendant’s affirmative defenses is moot.

Plaintiff also states in his notice of motion that “by way of the instant Motion, Plaintiff seeks a judgment in his favor and against Defendant, in the amount of $726,000.00, plus prejudgment interest of $167,278.36 (through January 18, 2024)…and attorneys’ fees and court costs as statutorily and contractually authorized, to be sought by way of subsequent memorandum of costs and motion/application for attorneys’ fees.” (Notice of Motion at p. 3:4-8.) As set forth above, the Court grants Plaintiff’s motion for summary judgment as to Plaintiff’s Complaint.

As discussed, Plaintiff states in his supporting declaration dated October 26, 2023 that “[t]o date, aside from the August 9, 2021 payment of $1,000.00, I have not received any further monetary payment from Charlie Tsai or anyone else on behalf of Charlie Tsai as required under the terms of the Settlement Agreement. Accordingly, Charlie Tsai has failed to pay the balance of $726,000.00 due under the Settlement Agreement even as of the date of this declaration.” (Cotraviwat Decl., ¶ 45.)

As also set forth above, the Settlement Agreement provides, inter alia, that “Tsai shall pay Cotraviwat the sum of $727,000 plus interest and any late fees pursuant to the schedule and under the terms set forth below.” (Cotraviwat Decl., ¶ 34, Ex. O, § 3(a).) The Settlement Agreement sets forth installment payment due dates of August 4, 2021, August 27, 2021, September 27, 2021, and October 27, 2021. (Cotraviwat Decl., ¶ 34, Ex. O, § 3(a).) In addition, the Settlement Agreement states, “if any Installment Payment is late, the interest rate on the unpaid balance shall increase to an annual rate of 10%.” (Cotraviwat Decl., ¶ 34, Ex. O, § 3(b).) Plaintiff cites to Civil Code section 3289, subdivision (a), which provides that “[a]ny legal rate of interest stipulated by a contract remains chargeable after a breach thereof, as before, until the contract is superseded by a verdict or other new obligation.”

Plaintiff asserts that “the Settlement Agreement was breached by [Defendant] effective September 30, 2021 when he failed to pay amounts due on the Settlement Sum as of that extended payment date.” (Suh Decl., ¶ 33.) In his supporting declaration, Plaintiff states, inter alia, that “[t]he third installment payment deadline of September 27, 2021 passed, and I had still not received any money from Charlie Tsai or anyone on behalf of Charlie Tsai, other than the $1,000.00 payment on August 9, 2021. However, based on the extension requested and granted, I presumed that a monetary payment would be made by no later than September 30, 2021 that satisfied the 1st, 2nd, and 3^rd installment payment obligations.” (Cotraviwat Decl., ¶ 43.) Plaintiff states that “September 30, 2021 came and passed, and I did not receive any monetary payment from Charlie Tsai or anyone on behalf of Charlie Tsai.” (Cotraviwat Decl., ¶ 44.)

Plaintiff’s counsel states in his supporting declaration that “I have computed that the number of days between September 30, 2021, the date of the breach, and the anticipated hearing date of this Motion, January 18, 2024, as 841 days. At the rate of 10% per annum, the total interest per year on the unpaid sum of $726,000.00 is $72,600.00. Dividing that annual figure by 365 days equates to $198.90 of interest accruing [on] a daily basis. Multiplying $198.90 by 841 days equals $167,278.36 in total accrued, prejudgment interest from September 30, 2021 to January 18, 2024.” (Suh Decl., ¶ 33.) In the opposition, Defendant does not appear to dispute Plaintiff’s interest calculations.

Based on the foregoing, the Court finds that Plaintiff has demonstrated that he is entitled to judgment against Defendant in the amount of $726,000.00, plus pre-judgment interest of $167,278.36.

Based on the foregoing, the Court grants Plaintiff’s motion for summary judgment as to Plaintiff’s Complaint. Plaintiff’s alternative motion for summary adjudication as to Defendant’s affirmative defenses is moot. The Court finds that Plaintiff has demonstrated that he is entitled to judgment against Defendant in the amount of $726,000.00, plus pre-judgment interest of $167,278.36.

The Court orders Plaintiff to file and serve a proposed judgment within 10 days of the date of this Order.¿Plaintiff must file a separately noticed motion should Plaintiff seek attorneys’ fees and costs.

[1]The Settlement Agreement contains installment payment due dates of 8/4/2021, 8/27/2021, 9/27/2021, and 10/27/2021. (Cotraviwat Decl., ¶ 34, Ex. O, § 3(a).)

[2]Civil Code section 1542 provides that “[a] general release does not extend to claims that the creditor or releasing party does not know or suspect to exist in his or her favor at the time of executing the release and that, if known by him or her, would have materially affected his or her settlement with the debtor or released party.”

ALEX COTRAVIWAT, Plaintiff, vs. CHARLIE CHENG-HAN TSAI, et al. Defendants.	Case No.:	21STCV37799 [r/w 22STCV14597]
	Hearing Date:	January 18, 2024
	Hearing Time:	2:00 p.m.
	[TENTATIVE] ORDER RE: PLAINTIFF’S MOTION FOR SUMMARY JUDGMENT OR IN THE ALTERNATIVE, SUMMARY ADJUDICATION AS TO PLAINTIFF’S 1ST AND 2ND CAUSES OF ACTION AND DEFENDANT’S 1ST AND 2ND AFFIRMATIVE DEFENSES

Superior Court of California

County of Los Angeles

Department 50